Hit Refresh … How Satya Nadella is creating the future of Microsoft with AI, clouds and a growth mindset

August 27, 2018

Microsoft’s Redmond Campus is huge. It’s gigantic, sprawling, and when you arrive in the reception building, you feel like you’re entering a futuristic college. It’s got a hallway dedicated to high fives.

Just outside of Seattle, it’s more like a town than a headquarters, with 125 buildings spread across a 500 acres of beautiful campus that is rich in pine trees, and well-tendered vegetation. To get around, the 40000 folks who work here take green Microsoft shuttles, but its still incredible easy to get lost.

I found the easiest way to see the campus was to get up early and go for a run around the campus’ many running trails. The nearby Aloft Redmond hotel is a perfect start point for this. In 45 minutes you can see the whole campus, from Bill Lake (where founder Gates met his wife Melinda) to Satya Nadella’s cockpit office in building 34. There are cricket pitches and shopping malls, soccer fields and even a pub too. It’s a stimulating place – beautiful fresh air, inspiring decor, mixed with tech history and the future.

Microsoft has 12 different divisions that generate a billion dollars in revenues. When the Windows business is in bad shape, the Servers and Tools group, or the Office group, picks up the slack. Internally this creates focus and complexity. Focus on products and sales. But more difficult to see the bigger picture, and to harness change in more integrated ways. It’s a place where vision, influence and leadership are key.

Which brings us back to Microsoft’s leader, Satya Nadella. Having spent quite some time working with the teams at Microsoft, I dedicated my summer reading to Hit Refresh, Nadella’s bestselling book.

The FT’s review of Hit Refresh started by saying that if you ask around the tech industry these days, it is hard to find anyone with a bad word to say about Satya Nadella. It could have something to do with the deftness with which Microsoft’s chief executive has turned around his company’s fortunes. Nearly four years into the job, a company whose fate seemed tied to the shrinking PC market has found a new lease of life.

Or it could be the way he has buried the hatchet with Microsoft’s old enemies. By making up with fellow Indian engineer Sundar Pichai at Google, he ended one of the industry’s most divisive rivalries. Even Apple has become the subject of polite co-operation.

Then again, it could be just that he is so, well, nice. Empathy is Nadella’s North Star. And in this short book, he does not just elevate it to the level of a personal philosophy. It is also the foundation on which to rebuild Microsoft’s culture, and the answer to one of the most pressing questions of our time: whether we can find a way to live in harmony with the robots (and each other) in the artificial intelligence-driven future.

A heavy dose of empathy, it turns out, was not a bad antidote to the things that ailed Microsoft. Feared and disliked during its heyday, there was little sympathy as its power waned with the PC market. Nadella is too much the diplomat to criticise his predecessors. Indeed, he pays generous tribute to Steve Ballmer for encouraging him to strike out in his own direction, while also noting that it was Ballmer who set the more open course for which Nadella himself has received the credit.

For anyone attuned to Microsoft’s history, there are some knowing references. He twice criticises a culture in which everyone felt the need to be “the smartest person in the room” — clearly an allusion to the hyper-competitiveness of Bill Gates, who made the company in his image. But is empathy a strong enough foundation on which to rebuild a corporate culture? Nadella encourages managers at a corporate getaway to tap into their deepest motivations. As they indulge in uncharacteristic self-examination, “teary eyes” are in evidence.

This is the “soul” of his book’s subtitle, as in: “The quest to rediscover Microsoft’s soul and imagine a better future for everyone”.

If he stumbles in describing how he sought to build a new culture, it is because he does not have the words here to convey the living, beating heart of the company. For Nadella, key moments include watching his employees get teary over a corporate video, or describing an internal email in which he outlined a new corporate mission statement.

Yet he was clearly on to something. Breaking down some of the internal barriers has had an energising effect. And he put his finger on what had gone wrong: the frustration of a workforce that was losing and no longer considered cool. Former Microsoft engineers and others close to the company testify to the change that Nadella has wrought.

The final chapters of Hit Refresh address some of the big questions facing technology. It has become fashionable to attack the power of Big Tech. Nadella, unabashed, insists on a “moral obligation” to push forward with innovation — and an equally powerful obligation to weigh social and political impacts of technologies like AI and to make sure the benefits are widely shared. Early in this book, Nadella admits to having felt some hesitation at writing a personal account so soon in his term. He should not worry. There will be more than enough material for a deeper look when it is all over.

HBR recently wrote a case study of Microsoft’s approach to “Instilling a Growth Mindset

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